Real estate decline 2020

Blitz

Sparrow
Canada too has almost no inventory. Dangerously low. Sales to Listings are through the roof. Prices have jumped.

What the hell is happening? I heard part of it might be the skyrocketing cost of wood. I know BC has shuttered a lot of mills recently I wonder if that has had an impact.

I've read that it's people fleeing condos for more space in a house because they don't want to do lockdown again in a 500 square foot concrete box. A time killing hobby of mine is following real estate on mls in western Canadian cities where I would choose to move my business to, Kelowna, Vancouver, Whistler, Canmore...at the low end there does seem to be super low inventory, which if you follow the logic above of not wanting to risk lockdown in a box, makes sense. Not going to downsize into a condo and not going to move unless necessary right now. We were looking to buy in early summer and everything in the 500-650 range that wasn't rundown went in a day or two.

At the super high end, everything in Kelowna, Whistler and W Van seems to sell unless it's hugely overpriced or un-renovated (no one has time to wait for that now) IE rich people want an escape from the potential disruptions and/ or the sense of a secure estate. In the middle (say $700k- $1m) everything except the perfectly renovated houses seems to sit on the market. My guess is move-uppers can't or won't risk it and move-downers would prefer to hold on to their larger property for the time being.

When we were looking to buy, we decided to rent (a house) on the theory the market will collapse along with the broader economy, which made sense. Of course, just like bitcoin and gold which never took off in the collapse, real life and theory don't always match up.
 

Max Roscoe

Kingfisher
That's indicative that you don't understand the economics. The money that's going to much of Europeans is what they would have spent on defense, had the US actually held them to the NATO agreements.

Alas, with Uncle Sugar standing at the ready to do whatever needed to be done (the cold war, Kosovo, Libya, etc.), the Euroid governments slacked off and created all those economic social freebies, when in reality it was indirectly subsidized by the US.

Had nobody done anything, the USSR would have stolen the rest of Europe just like they did Eastern Europe after WW2. Sometimes I think we should have let them take it.
The economics of the bailout are that while certain societies chose to act to help those in direct need (the elderly, the unemployed, the sick) the US government enacted a $2.2 trillion payout, which was essentially a massive transfer of wealth to the elite class. To put this in context, when I was a child, the entire size of the US government spending was below $1 trillion.


Of that $2.2 trillion, $218 billion, or less than 10% went to families, and the other 90% went to elites.


As to whether European nations are spending an appropriate amount of money on armies, that is up to their governments to decide, but it is notable that Europe as a whole is one of the most militarily stable and peaceful regions on the planet (the crime waves and problems they are currently facing are not military matters, or to the degree they are, they are actually *caused* by excessive military spending, namely the US arming "rebel" groups in Syria which is the pretext for massive invasion of people under the guise of "refugees" to Europe. I do find the claim that nations should be arming themselves instead of addressing the medical problem, no matter how exagerrated it may be, rather odd.

Whether or not a country is better served by helping its citizens make rent payments or buying missiles and tanks, the fact remains that the US solution was to vastly enrich the elite class. A massive bailout in the trillions of dollars to corporations and billionaires, (not to mention the indirect effects of enriching people like Jeff Bezos as retail is shuttered while mail order delivery through Amazon skyrockets) is fundamentally changing our society.

To those that are naive, it may appear that "yes the corporations were helped to a larger extent, but the individuals were also helped." This is not true, because the government did not have the money on hand, but instead created it by inflating the money supply. If one inflates the supply of money by x amount, but gives a disproportional amount to a certain group, that group may be aided somewhat over the short term (weeks/months) but is impoverished in the long run, as money is merely a tool of allocating resources proportionally, and they received a lower proportion of the new supply of money.

Dylan Ratigan and Jimmy Dore have done several discussions on the massive theft conceiled as "stimulus"
 

EndlessGravity

Kingfisher
I don´t know if it´s 10% who need the forbearance. Or less. Some of them might just be using the forbearance to dar costs and not because they need.

An unimportant difference. People are either unable or unwilling to pay for their basic needs. I would guess more of the first though. If we're generous and cut the number in half and say only 5% are unable, we're still at more than double the Great Recession.

Why is it a "catastrophic sign"?

Just think about if you went into the supermarket and there was 30% less food and prices were going up. What would be your reaction?

The economy NEEDS smooth real estate transactions, if only because 10s of billions of dollars in cash-out refinances are used by Americans every year as their personal piggy banks to afford their lifestyles. The reduction in inventory, IMHO, is probably because people can't get approved for loans to buy their next house. We've seen this developing in lending standards tightening A LOT since March. That loss in economic activity, paired up with the 10% of forbearance, should terrify people.

The real estate market is beyond broken...and the government is playing patty-cake.
 

NoMoreTO

Ostrich
I have a Toronto Condo which will soon be vacant. The tenant lost his high paying IT Sales Job. I have decided to keep it and simply ride it out. I am 5 years in and up a fair bit on it right now. Selling Real Estate is a real process. The dip has already begun and it's bearing itself out in the real market before it will show in the "Stats". I spoke to a realtor who lives in my building, in Toronto there are some near term headwinds which might clear out a little.
- New inventory on the market from AirBnBs being taken off
- New Builds coming to completion this year
- Less demand for condos and city life due to lockdowns, prices, not having to actually work downtown

I'm hoping that perhaps the fog clears in early 2021. Things are sliding already so no point in selling into the slide.

A good like 2 minute video
Inventories are starting to Rise (New Builds) + Mortgage Demand is going down (less buyers)
= Decreased Real esate Prices or Churn in the market


 
I have no idea what's happening. I was with everyone else at the beginning of this thread, thinking RE would crash. Outside of expected drops in SF, NYC, everywhere else is booming.

I understand that people are fleeing the cities for greener pastures. But second-tier cities aren't really "greener pastures." They're just smaller.

I don't know anyone who's buying RE right now, and it's crazy seeing these listings fly off the market.

I regularly listen to a Property Industry podcast, and for the last 5-6 months, the hosts stated that quality property would maintain value. There is a lot of risk in buying newer apartments, especially when there are a number of reports of substandard build quality. New apartment developments are oversupplied, with a lot of inner city suburbs experiencing 2k - 3k apartments completed in the short term.

From my observations, suburban, and acreage areas have maintained, or exceeded their value. I would imagine that this is due to people placing greater value on open space, and staying at home mostly.
 

NoMoreTO

Ostrich
Have/had you thought about making your place an Airbnb, getting someone to manage it?

It's a 3 month minimum on renting it out, most Condos in Toronto have these rules and overall I am grateful for them.

I will probably do a short term furnished rental. I'll wait for a good tenant, and will leave it empty if I don't find one.
 

Caractacus Potts

Woodpecker
Gold Member
I live in a blue city. A lot of people want out of the downtown area due to the riots and the ongoing mismanagement by our diminutive mayor. A friend's former coworker put his house on the market for the heck of it, just to see what he could get. He lives outside the riot zone in a solid middle class area. He had multiple offers. He and his wife sold it in a week for $28K more than the asking price!

My sister and brother in law live out west now but kept their house here and rent it out. My brother in law told me has had a few calls from realtors asking if he is interested in selling. Without the restaurants, stores and other amenities, in addition to working from home, many people see no reason to stay in a high rise in the city center if you are not allowed to go anywhere. Add to that, the mayor and our governor keep talking about the new normal and things being like this for the next year... people have had enough and want out.
 

NoMoreTO

Ostrich
Without the restaurants, stores and other amenities, in addition to working from home, many people see no reason to stay in a high rise in the city center if you are not allowed to go anywhere. Add to that, the mayor and our governor keep talking about the new normal and things being like this for the next year... people have had enough and want out.

^^^ This.

Apartments are the worst for Corona. You have the least space, least nature, and all the benefits and amenities are null.

It might be that housing is going "up" or is "even" overall. But there does seem to be a shift out of downtown high rise living.
 

FactusIRX

Woodpecker
I've read that it's people fleeing condos for more space in a house because they don't want to do lockdown again in a 500 square foot concrete box. A time killing hobby of mine is following real estate on mls in western Canadian cities where I would choose to move my business to, Kelowna, Vancouver, Whistler, Canmore...at the low end there does seem to be super low inventory, which if you follow the logic above of not wanting to risk lockdown in a box, makes sense. Not going to downsize into a condo and not going to move unless necessary right now. We were looking to buy in early summer and everything in the 500-650 range that wasn't rundown went in a day or two.

At the super high end, everything in Kelowna, Whistler and W Van seems to sell unless it's hugely overpriced or un-renovated (no one has time to wait for that now) IE rich people want an escape from the potential disruptions and/ or the sense of a secure estate. In the middle (say $700k- $1m) everything except the perfectly renovated houses seems to sit on the market. My guess is move-uppers can't or won't risk it and move-downers would prefer to hold on to their larger property for the time being.

When we were looking to buy, we decided to rent (a house) on the theory the market will collapse along with the broader economy, which made sense. Of course, just like bitcoin and gold which never took off in the collapse, real life and theory don't always match up.
I was looking at buying as well, but stopped because the market is a complete clusker****. People have more "savings" because of debt forgiveness plans combined with the low interest rates, the Federal government's idiotic "first-time buyers incentive", and free money (CERB) means your average person (450k-550k) is looking to buy (btw, this is almost all third worlders that have shuffled their way into Canada over the last 5 years). As a result, everyone is over listing their house to fit within that margin. I've seen absolute crack shacks in the garbage part of the City being listed at 550k. At the same time, there are thousands of people only paying their mortgage because of debt referral programs by banks. It's a complete and total bubble. On the other hand, as a renter, I have complete leverage over my landlord because nobody is renting anymore.


Here's what is going to happen in 2021: the debt forgiveness programs are going to stop and stupid people (ie. the vast majority of people) are going to get crunched as they find they have over-leveraged themselves. This is going to trigger a whole flood of foreclosures, which is going to tank the market and cause a huge, huge recession. As a result, the Liberal Government will borrow/spend even more, causing inflation and a further downgrading of the economy. At this point, the economy will be so bad, the Liberal Government will be defeated, and Canadians will reelect the Conservatives to fix the mess. We will go into a decade of austerity and poverty.
 

NoMoreTO

Ostrich
Here's what is going to happen in 2021: the debt forgiveness programs are going to stop and stupid people (ie. the vast majority of people) are going to get crunched as they find they have over-leveraged themselves. This is going to trigger a whole flood of foreclosures, which is going to tank the market and cause a huge, huge recession. As a result, the Liberal Government will borrow/spend even more, causing inflation and a further downgrading of the economy. At this point, the economy will be so bad, the Liberal Government will be defeated, and Canadians will reelect the Conservatives to fix the mess. We will go into a decade of austerity and poverty.

Yes. Your prediction has something to it.

It's a good time to pay your mortgage down on your principal residence.

I wonder if we will truly go back to Austerity, or if the Globalists have a different plan for us this time.
 

Blitz

Sparrow
I was looking at buying as well, but stopped because the market is a complete clusker****. People have more "savings" because of debt forgiveness plans combined with the low interest rates, the Federal government's idiotic "first-time buyers incentive", and free money (CERB) means your average person (450k-550k) is looking to buy (btw, this is almost all third worlders that have shuffled their way into Canada over the last 5 years). As a result, everyone is over listing their house to fit within that margin. I've seen absolute crack shacks in the garbage part of the City being listed at 550k. At the same time, there are thousands of people only paying their mortgage because of debt referral programs by banks. It's a complete and total bubble. On the other hand, as a renter, I have complete leverage over my landlord because nobody is renting anymore.


Here's what is going to happen in 2021: the debt forgiveness programs are going to stop and stupid people (ie. the vast majority of people) are going to get crunched as they find they have over-leveraged themselves. This is going to trigger a whole flood of foreclosures, which is going to tank the market and cause a huge, huge recession. As a result, the Liberal Government will borrow/spend even more, causing inflation and a further downgrading of the economy. At this point, the economy will be so bad, the Liberal Government will be defeated, and Canadians will reelect the Conservatives to fix the mess. We will go into a decade of austerity and poverty.

Problem is, both the liberals and conservatives (O'Toole has said so) will just turn on the immigration taps to keep the housing market propped up, which I'd argue is a larger problem. Housing needs to regress 25-50% in this country; it's ludicrous the cost when we have so much available land. While I do generally agree that people will be in trouble next year, immigrants who are so repressed in their home countries yet somehow have enough money for Canadian housing will move in and snap up property on the cheap. So to add to your scenario, we're creating a parallel reality where housing will be propped up, actual Canadians will be forced out because the domestic economy can no longer support these prices, and Magic Dirt Canadians will start taking over neighbourhoods even more so.
 

FactusIRX

Woodpecker
Problem is, both the liberals and conservatives (O'Toole has said so) will just turn on the immigration taps to keep the housing market propped up, which I'd argue is a larger problem. Housing needs to regress 25-50% in this country; it's ludicrous the cost when we have so much available land. While I do generally agree that people will be in trouble next year, immigrants who are so repressed in their home countries yet somehow have enough money for Canadian housing will move in and snap up property on the cheap. So to add to your scenario, we're creating a parallel reality where housing will be propped up, actual Canadians will be forced out because the domestic economy can no longer support these prices, and Magic Dirt Canadians will start taking over neighbourhoods even more so.
Yes, I agree, the housing market will never, ever be good for white Canadians.
 

Laner

Hummingbird
Gold Member
Problem is, both the liberals and conservatives (O'Toole has said so) will just turn on the immigration taps to keep the housing market propped up, which I'd argue is a larger problem. Housing needs to regress 25-50% in this country; it's ludicrous the cost when we have so much available land. While I do generally agree that people will be in trouble next year, immigrants who are so repressed in their home countries yet somehow have enough money for Canadian housing will move in and snap up property on the cheap. So to add to your scenario, we're creating a parallel reality where housing will be propped up, actual Canadians will be forced out because the domestic economy can no longer support these prices, and Magic Dirt Canadians will start taking over neighbourhoods even more so.

Canada needs to open up Crown land for purchase.

This is getting out of hand. A million for a fucking townhouse in Yellowknife. Yes, Yellowknife. The city where you must drive through 15 hours of wilderness just to get there. But good luck getting any of that surrounding Crown lands as an acreage or business plot.
 

Dr. Howard

Peacock
Gold Member
Canada needs to open up Crown land for purchase.

This is getting out of hand. A million for a fucking townhouse in Yellowknife. Yes, Yellowknife. The city where you must drive through 15 hours of wilderness just to get there. But good luck getting any of that surrounding Crown lands as an acreage or business plot.

I 100% agree, a family member of mine and I were just sharing stories the other weekend as to how crown land is the worst of both worlds in Canada. It's seem as property and managed to exclude others by mining and forestry leaseholders with barely any Canadian interest anymore and on the other hand, these lease holders regularly get their operations screwed up by silly government intervention.

If the government went through a bonanza to sell off crown land in concert with enlarging or restoring first nations royalty/resource areas everyone would be a lot happier. The mining and forestry companies could just run their businesses as they see fit on the lands they purchased, the government would get an influx of cash and private citizens could expand their holdings.

I am being an optimist though, the minute the opened it up, China would own what the oil, mining and forestry companies couldn't buy up.
 

kosko

Peacock
Gold Member
I have a Toronto Condo which will soon be vacant. The tenant lost his high paying IT Sales Job. I have decided to keep it and simply ride it out. I am 5 years in and up a fair bit on it right now. Selling Real Estate is a real process. The dip has already begun and it's bearing itself out in the real market before it will show in the "Stats". I spoke to a realtor who lives in my building, in Toronto there are some near term headwinds which might clear out a little.
- New inventory on the market from AirBnBs being taken off
- New Builds coming to completion this year
- Less demand for condos and city life due to lockdowns, prices, not having to actually work downtown

I'm hoping that perhaps the fog clears in early 2021. Things are sliding already so no point in selling into the slide.

A good like 2 minute video
Inventories are starting to Rise (New Builds) + Mortgage Demand is going down (less buyers)
= Decreased Real esate Prices or Churn in the market



Real Estate is hyper-local. Yes, there are larger trends that impact RE (Interest rates, migration, etc) but there are very localized aspects unique to each market. In Toronto, it is a perfect storm because there is a record level of inventory coming on-line shortly, something along the lines of ~25,000 houses and condos is starting to flood the market now and into 2021, couple this with AirBnb speculators getting roasted right now with many of them not having much sophistication to ride out this wave and are dumping their units.

I want to clarify that these new builds coming on-line have been in the pipeline for years, everyone knew they were coming but of course, the biased and snake-oil RE Sales Agents and Mortgage hustlers did not tell anyone this of course as they have the interest to keep people in the dark.

Next, the great exodus due to Covid is hype up by RE Agents. Yes, some people are fleeing the city but these are people that always thought Toronto was a dump and only stayed here because of the economy. Once remote work has become a thing they took the first chance they could to escape. For these folks, it was always not if but 'when'. RE Agents are hyping this up as they want to get some commissions off these folks on the way out.
 

Blitz

Sparrow

NoMoreTO

Ostrich
Canada needs to open up Crown land for purchase.

This is getting out of hand. A million for a fucking townhouse in Yellowknife. Yes, Yellowknife. The city where you must drive through 15 hours of wilderness just to get there. But good luck getting any of that surrounding Crown lands as an acreage or business plot.

Wouldn't Queen Elizabeth 2 or Weirdo Prince Charles just take the money ?
 
Top